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Thursday, March 28, 2024

The Great Long Bond

Courtesy of Doug Short.

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.


You gotta love the long bond. Check out the monthly T-Bond futures chart below. It trends up for thirty-two years, and then decides to have a bullish blow-out through its trend-channel. Low beta U.S. Treasuries offered up a risk-free trade of a lifetime gift to true trend followers. This is a classic example that illustrates why it’s wise to look at charts.


 

 

Many have surmised T-Bond’s demise for quite some time, and granted, it’s very tough to get bullish at this point. Getting bullish is nearly impossible with all the chatter about the “biggest of all bubbles.” But a real contrarian might contemplate it. If we’re truly in a liquidity trap, and the investment world allows the U.S. to approach the national debt level of Japan, then maybe some of us should be contrarians for just a bit longer.

History will look at this Treasury rally in amazement. It reminds me of a legendary story once told by the late Olympian Abel Kiviat, and involving the late great, Jim Thorpe. Kiviat recounted how at an embassy reception during the 1912 Olympics, a renowned champion high jumper was asked to jump up and touch the room’s chandelier. He failed. Then the much shorter Thorpe reportedly took off his jacket, jumped up, and actually held on to the chandelier.

Whether you’re bullish, bearish or indifferent, you must admit that this chart is a thing of beauty.

Dominic Cimino

Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Preferred planning concepts, LLC & Cambridge are not affiliated.


? 2012, Dominic Cimino of Preferred Planning Concepts, LLC (You can explore the services offered by Preferred Planning Concepts by viewing us on our website at www.ppcplanning.com) Any redistribution, reprinting, or reference to this chart or content is allowed so long as reference to the author and source is acknowledged.

Important Disclosures

Please be aware that this is not a recommendation to purchase or sell any security. This is not a recommendation for any individual or institution to alter their portfolio holdings. Every individual or institution has its own risk tolerance and investment objectives and perspectives.

Any above opinions of the author should be viewed as such. These opinions in no way represent any type of guarantee. Realize that if you choose to invest in securities, investing in securities carries with it uncertainty and the risk of loss of principal. Lost investment opportunity is also a possibility. Investing in securities carries no guarantees.

Past performance is no guarantee of future results. The price movements within capital markets cannot be guaranteed and always remain uncertain. The above opinions are meant to stimulate thought and should be viewed as such. You are encouraged to discuss these views with your representatives if you have any questions or concerns.

Any indices mentioned are unmanaged and cannot be invested in directly.

It must here be mentioned that technical analysis offers no guarantees of future price movements. Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain.

Neither Cambridge Investment Research nor Preferred Planning Concepts is responsible for the accuracy of content provided by third parties. All material presented herein is believed to be reliable but we cannot attest to its accuracy.

All charts presented were made available by eSignal, a charting service available to individuals or professionals. Anyone interested in exploring the potentials of eSignal should give us a call.

 

 

 

 

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